SmartRent stock target cut to $1.60 by Keefe Bruyette & Woods

Published 06/03/2025, 13:44
SmartRent stock target cut to $1.60 by Keefe Bruyette & Woods

On Thursday, Keefe Bruyette & Woods (KBW) analyst Ryan Tomasello adjusted the price target on SmartRent (NYSE:SMRT) to $1.60, down from the previous $2.00, while keeping a Market Perform rating on the company’s shares. Tomasello noted that SmartRent’s adjusted EBITDA of negative $7.4 million was underwhelming compared to KBW and consensus estimates, which anticipated negative $3.9 million and negative $4.2 million, respectively. This shortfall was attributed to a decline in hardware revenue and gross margins.

SmartRent, which has recently undergone a change in leadership, did not issue guidance for 2025. The absence of guidance was largely ascribed to the new CEO’s induction approximately a week ago. Despite current challenges, the company maintains a strong liquidity position with a current ratio of 3.63 and holds more cash than debt on its balance sheet. Other contributing factors included broader economic uncertainties impacting the apartment sector and ambiguity regarding tariffs. The company has postponed sharing substantive updates about its turnaround strategy as it navigates through these changes.

The firm’s immediate priorities are to enhance SmartRent’s cost structure, rejuvenate its smart operations business, and establish a sales organization capable of scaling effectively. Given these circumstances, 2025 is expected to be a year of transition for SmartRent, with limited clarity in the short term until the company divulges more details about its strategic direction.

Although SmartRent’s valuation may seem attractive, Tomasello suggests maintaining a cautious stance until there is more certainty regarding the company’s future plans. As a result, KBW has revised its estimates and target for SmartRent accordingly.

In other recent news, SmartRent Inc. reported disappointing fourth-quarter 2024 earnings with an earnings per share of -$0.06, missing the forecast of -$0.02. The company also experienced a significant revenue shortfall, reporting $35.4 million against the anticipated $47.24 million. This represents a 41% year-over-year decline in revenue. SmartRent’s full-year revenue was $174.9 million, marking a 26% decrease from 2023. Despite these challenges, the company saw growth in its software-as-a-service (SaaS) revenue, which now makes up 38% of total revenue, up from 19% the previous year.

The company reported a net loss of $11.4 million for the quarter and $33.6 million for the full year. On a positive note, SmartRent’s gross margin improved slightly to 28.7% in the fourth quarter. The company is undergoing a strategic transformation toward a SaaS-focused business model, with plans to invest in sales and smart operations development. Analysts have not provided specific guidance for upcoming quarters due to market uncertainties, but the company remains committed to its SaaS transition. These developments follow a leadership transition, with Shane Paladin recently appointed as CEO.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.